Olshan Insights - August 2024
Firm News
Olshan’s Shareholder Activism Practice Highlighted by The Deal in “Who’s Helping Whom ’24: Legal Advisors” Feature
Olshan’s Shareholder Activism Practice was recently highlighted in a feature by?The Deal?(subscription required) entitled “Who’s Helping Whom ’24: Legal Advisors,” which focused on the most prominent law firms in the activist space during the first half of 2024. The article notes, “Olshan Frome Wolosky LLP continues to dominate the legal adviser to activist category by the numbers, and the firm advised on one of the biggest contests of 2024—the total board victory of Browning West LP at Gildan Activewear Inc. (GIL), a battle that reinstated an ousted CEO.”
OS Therapies Closes $6.4M Initial Public Offering on NYSE American
Olshan served as counsel to OS Therapies Incorporated, an antibody drug conjugate (ADC) and immunotherapy research and clinical stage biopharmaceutical company, in its initial public offering of 1,600,000 shares of common stock at a public offering price of $4.00 per share, raising gross proceeds of $6.4 million. The Company also granted the underwriters a 45-day option to purchase additional shares of common stock at the public offering price to cover over-allotments. The net proceeds from the offering are expected to be approximately $6.0 million, after deducting underwriting discounts and commissions. The Company intends to use the net proceeds to advance the clinical development of its product candidates – OST-HER2 and OST-tADC – and discover and develop new product candidates. The Olshan team was led by corporate partner Spencer Feldman and associate Dakota Forsyth.
Diligent and Olshan Reveal Latest Shareholder Activism Trends in The Proxy Season Review 2024
Diligent Market Intelligence issued?The Proxy Season Review 2024?in collaboration with Olshan’s Shareholder Activism Practice. The review features a foreword from?Andrew Freedman, Chair of Olshan’s Shareholder Activism practice, in which Andy writes, “Shareholder activism in the U.S. continued to ride the strong momentum it gained during the final few months of 2023.” The review also includes an in-depth interview with Vice Chair of the firm’s Shareholder Activism Practice?Ryan Nebel?for the Q&A feature. Ryan emphasizes the effect that the universal proxy card has had on campaigns in 2024 now that activists and companies are more familiar with the regime: “Contributing to the wave of early settlements this year was the success activists enjoyed in 2023 during the first full season of the UPC regime. The targeted approach taken by activists in 2023 resulted in a significant percentage of seats won relative to the total sought. With this in mind, many companies elected to quickly settle in 2024 when faced with an activist targeting one or two of the most vulnerable incumbents.”
Nina Roket Honored by GlobeSt. in Its CRE’s Women of Influence, Class of 2024
Olshan Co-Managing Partner, Co-Chair of the firm’s Real Estate Law Practice and Chair of Commercial Leasing Practice?Nina Roket?has been honored by GlobeSt. in its?CRE's Women of Influence, Class of 2024?(subscription required) in the CRE Legal Counsel category. With this award, GlobeSt. recognizes the individuals who have personally impacted the market and significantly driven the industry to new heights via their outstanding successes.
Lawdragon Recognizes Thomas Kearns in its 2024 List of 500 Leading Global Real Estate Lawyers
Lawdragon named Co-Chair of Olshan’s Real Estate Law practice Thomas Kearns to its 2024 list of the “500 Leading Global Real Estate Lawyers.” The list spotlights legal advisors for their “depth of knowledge in the law,” as well as for their excellence and leadership in the legal profession.
Client Alerts
Microsoft Outage Highlights the Need for Robust Review of Cyber BI and CBI Insurance Coverage
On Friday, July 19, 2024, a “cyber outage” to systems relying on Microsoft Windows systems reportedly caused by a faulty software update resulted in massive disruptions to businesses across the world. Experts have asserted that this event was the “largest IT outage in history.” The enormous disruption to emergency services and airlines has been well reported: 911 emergency services across the country were down and thousands of flights had been cancelled. But these issues are just the beginning, and the ripple effect this outage has had and will continue to have across a multitude of businesses likely will not be known or quantifiable for weeks, if not months. It remains unclear how supply and distribution chains have been affected by this situation and how long it will take systems to normalize.
Just last month, Olshan provided commentary to Law360 in an article discussing the impact and insurance implications from a cyberattack on a software vendor that caused widespread disruption to automobile dealerships around the country. The July 19 Microsoft outage has a much broader impact, but many of the insurance issues remain the same. Companies need to assess their cyber liability insurance policies and focus on business interruption (or “BI”) and contingent business interruption (or “CBI”) coverage opportunities to minimize their losses through insurance recovery.
FTC's Non-Compete Ban in Doubt
A federal judge in the U.S. District Court for the Northern District of Texas has issued a preliminary ruling enjoining the Federal Trade Commission’s (“FTC”) recently enacted?rule?prohibiting non-compete clauses (the “Rule”). The Rule would ban most direct and some indirect contractual limits on employees’ ability to work for competing employers after leaving their current jobs.?See?Client Alert: FTC Bans Non-Competes.
For now, the ruling in?Ryan LLC v. FTC?only applies to the plaintiffs and various business associations who intervened seeking to set aside the Rule. The Rule is currently set to take effect on September 4, 2024 as to all other employers.
However, Judge Ada Brown, who granted the preliminary injunction in this case, has indicated that she intends to issue a final ruling on or before August 30, 2024. In granting the preliminary injunction, Judge Brown found that the plaintiffs are “likely to succeed on the merits” in their challenge, and continued: “[T]he Court concludes the [FTC] has exceeded its statutory authority in promulgating the Non-Compete Rule.” If the Court’s final ruling is consistent with this finding, it is likely that the final injunction will be nationwide, effectively barring the FTC from enforcing the Rule.
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Speaking Engagement
Meagan Reda and Kenneth Mantel Spoke at Diligent’s 2024 Proxy Season Review Webinar
Olshan Shareholder Activism partners?Meagan Reda?and?Kenneth Mantel?spoke at the?Diligent Market Intelligence?2024 Proxy Season Review webinar on July 30, 2024. In conversation with Publications Editor of Diligent Rebecca Sherratt and founder and CEO of Campaign Management Michael Fein, Meagan and Ken discussed the trends that have emerged from the 2024 proxy season and the lessons we can draw from the biggest activist campaigns of the year.
Quoted
Andrew Freedman Quoted in Law360 on the Surge of Shareholder Activism in 1H 2024
Olshan Co-Managing Partner and Chair of the firm’s Shareholder Activism Practice?Andrew Freedman?was quoted in a?Law360?article (subscription required) on the surge of activist demands against U.S. companies in the first half of 2024. The number of U.S. companies subject to shareholder activist demands in the first half of the year is up 9% compared to the first half of 2023 and up 11.4% compared to the first half of 2022. Months of historic stock market gains have led to dislocation opportunities, Andy explained, providing an incentive for both seasoned activists and new entrants to call companies out when their stocks aren’t performing up to par: “More investors are willing to engage in activism than ever before. We’re seeing that firsthand at Olshan, where every week a new investor is on the scene and willing to take on a new campaign.”
Jeremy King Quoted in Law360 on CDK Global’s Ransomware Attack and Best Practices for Seeking Relief Through Cyber Insurance Policies
Chair of Olshan’s Insurance Coverage Practice?Jeremy King?was quoted in a?Law360?article (subscription required) on the ransomware attack against auto software company CDK Global that caused an ongoing disruption in the operations of car dealerships, who use the software to manage a range of their operations, and sent policyholder experts pointing to cyber insurance policies for immediate relief. Many cyber insurance policies include some form of coverage for contingent business interruption, as when a software disruption leads to loss of income to a third party. Depending on the language of the policy, however, costs incurred by a business to work around a service interruption may also qualify for coverage, Jeremy explained: “The income that the business itself loses because of an outage is just one component of the contingent business interruption coverage, and in this day and age, it’s becoming easier to tie that directly to business losses. People recognize how interdependent companies are on their computer networks.”
Andrew Freedman Quoted in S&P Global on the Surge of Shareholder Activism at Nonbank Financial Institutions
Olshan Co-Managing Partner and Chair of the firm’s Shareholder Activism Practice?Andrew Freedman?was quoted in a?S&P Global?article on the surge of shareholder activist campaigns at nonbank financial institutions throughout 2023 and continuing in 2024. In 2023, activists launched 115 campaigns targeting nonbank financial institutions and have already launched 101 such campaigns in the first half of 2024. Andy explained that shareholders are targeting increasingly visible underperforming companies to maximize their gains and spur turnarounds. He added that, unlike before, shareholders are no longer waiting for the January-to-March window just before the nomination deadline for companies’ annual meetings to launch campaigns. “There’s been much more activity this summer than we’ve seen in the past,” Andy said. Overall, he noted, the number of investors willing to engage is shareholder activism is climbing.
Advertising Law Blog
USPTO Updates in the Virtual World
The United States Patent and Trademark Office (“USPTO”) is constantly adapting to the changing world, which now includes the virtual world, and more and more trademark applicants are seeking to obtain trademark protection for virtual goods and services.?As a reminder, the USPTO has adopted an international system of classifying goods and services in trademark applications, with 45 different categories. There is some confusion about how virtual goods and services are classified. ?
For services, it is important to note that the means by which a service is rendered does not determine the classification.?Instead, it is the end result of the services that determines the proper USPTO class of services.?If the end result is an actual service, it is classified according to the standard classification for that service, but if it is a virtual result, then it is likely classified as an entertainment service.
Read the entire Advertising, Marketing and Promotions blog post authored by Andrew Lustigman and Elizabeth Nunn (Olshan Branding Group paralegal)
Minnesota’s New Price Transparency Law Goes into Effect January 1, 2025
On the heels of California’s “Hidden Fees Statute,” Minnesota has enacted its own price transparency law. Under the new Minnesota law, any business must disclose all mandatory fees or surcharges any time that that business advertises, displays or offers a price for goods or services.
The Minnesota law defines a mandatory fee as a fee or surcharge that (i) must be paid in order to purchase the goods or services advertised, (ii) is not reasonably avoidable by the consumer, or (iii) a reasonable person would expect to be included in the purchase of the goods or services being advertised. For the purposes of this law, a mandatory fee does not include taxes imposed by a government entity of the sale, use, purchase, receipt or delivery of the goods or services.